Credit Suisse, is the first major Swiss bank to face criminal trial. They have ben fined CHF 2 million for allowing cocaine dealers to launder money through the Credit Suisse institution.
A former banker was also found guilty of qualified money laundering, allowing the Bulgarian drug trafficking gang to launder the proceeds of their crimes.
At a federal criminal court in Bellinzona in southern Switzerland – Credit Suisse (CSGN.S) was convicted by of failing to prevent money-laundering by a Bulgarian cocaine trafficking gang betwen 2004-2008 . The judge ruled that the actions of an employee had “contributed” to allowing the criminal organisation to withdraw CHF 19 million from Switzerland. The Bank was also found guilty of criminal laxity in monitoring its employees and enforcing anti money laundering measures.
“These deficiencies enabled the withdrawal of the criminal organisation’s assets, which was the basis for the conviction of the bank’s former employee for qualified money laundering,” the court said.
During the court haring there was descriptions oof large sums of cash in suitcases and testimonies on murders. Handing down the verdict the presiding judge said:
The company could have prevented the infringement if it had fulfilled its organisational obligations
adding that the former employee’s superiors had been “passive”.
Credit Suisse was fined 2 million Swiss francs ($2.1 million). The court also ordered the confiscation of assets worth more than 12 million francs that the drug gang held in accounts at Credit Suisse, and ordered the bank to relinquish more than 19 million francs — the amount that could not be confiscated due to internal deficiencies at Credit Suisse.The court handed the former employee, who cannot be named under Swiss privacy laws, a suspended 20-month prison sentence and a fine for money laundering.
The bank and the former employee have denied the charges and said that they intend to appeal the verdict. If the bank fails in its
The ruling marks another headache for Switzerland’s second-biggest bank, which has been reeling from billions in losses racked up via risk-management and compliance blunders. It is also another case that highlights the economic crime magnet that Switzerland looks like it is becoming.
In 2021, the Abu Dhabi-owned Falcon Private Bank, which was based in Zurich, was fined CHF3.5 million External link for failing to set up the necessary controls to prevent money laundering.
Corruption and money laundering experts had said the fact that Switzerland had taken legal action against a global banking player like Credit Suisse could send a powerful message in a country famous for its banking industry.
Mark Pieth, a money laundering expert at the University of Basel, said
“This has the potential to be a watershed moment for Switzerland ,What is significant about this case is that Switzerland is taking legal action against a company and not just any company – Credit Suisse is one of the jewels in the Swiss crown.”
Swiss private banks have adopted tougher anti-money laundering checks after an international regulatory crackdown to prevent money laundering.
Under Swiss law, a company can be held liable for inadequate organisation or failing to take all reasonable measures to prevent a crime from happening.
Credit Suisse has disputed the illegal origin of the money, saying that a former Bulgarian wrestler and his circle operated legitimate businesses in construction, leasing and hotels.